Could Your Credit Rating Be Affected By Your Maintenance Payments?


Maybe you want to apply for a mortgage, a loan for the Christmas period, or a credit card to tide you over during the hard period to come at the start of the New Year? If you have children, you may be even more in need of the funds.

Child maintenance is a responsibility not a choice
Parents who default on child maintenance payments, may find all of these monetary safety nets are taken from beneath them, under new government plans.

Bad Credit For Those Who Avoid Payment

Starting from March 2015, the Child Maintenance Service (CMS) and Child Support Agency (CSA) in Scotland, England and Wales could be sharing your child maintenance payment record with credit reference agencies. These agencies would then be able to use this data to decide whether you can receive credit or not.

For those parents who do keep up to date with their payments and don't run into arrears, they can request that their payment information is shared to boost their ability to get credit.

Only a small amount of cases will be affected by the proposed changes where a liability order has been issued by a court. A liability order allows the CMS or CSA to take further action against a maintenance dodger. With the power of this order, bailiffs will be able to take your goods away or apply to the court to put a charge on your property (a charging order).

Measures To Be Used Minimally

Gingerbread chief executive Fiona Weir has emphasised that "more than £1bn" is owed in unpaid child maintenance and less than 20% are paying that money back. Gingerbread is a charity for single parents who provide practical advice.

The government hopes that these new measures, instead of being purely punitive, will have a deterrent effect on parents that don't pay for their children. The child maintenance minister Steve Webb said that absent parents were "leaving families without financial support" causing children to miss out. The problem at hand is only caused by a small amount of absent parents and it's hoped that the powers will be used very little.

Carol Chrisfield, a Family Law Solicitor in our Bristol office sighted this proposal as a "significant change to the system" which may well work as a deterrent but could potentially force "absent parents to stay absent and not come forward for fear that doing so may affect their credit rating."

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